Kansai airport still struggling after 14 years

OSAKA — Fourteen years after opening and a year after its second runway was completed, Kansai airport is still struggling to survive as canceled flights and political clashes with local and central government officials leave the airport’s future up in the air.

Since opening on Sept. 4, 1994, the number of flights annually has fluctuated, dropping to a low of 100,000 in 2003 and then rising to about 129,000 in 2007, thanks primarily to an aggressive marketing campaign in China and Asia that has attracted more passenger and cargo flights.

The number of passengers, however, has remained fairly constant since 2002, when nearly 17 million people used the airport. In 2007, that dropped to about 16.7 million.

When the second runway opened in August 2007, local government and business officials immediately began pushing for central government funding to turn the airport into a major international cargo hub.

Like passenger flights, cargo flights were also fluctuating. In fiscal 2006, freight flights to Kansai airport totaled 14,582 and declined to 18,448 in fiscal 2007. In terms of tonnage, the airport’s high was 972 million tons of cargo in 2000. This later dropped to 767 million tons in 2002 and 847 million tons in 2007.

Sets of plans were drawn up that called for construction of state-of-the-art cargo facilities to compete with other domestic airports, as well as Incheon airport in South Korea and Shanghai airport.

But by the time the second runway opened, Kansai airport had failed to attract the annual 135,000 flights local officials had promised.

“Kansai airport has become the worst possible fiasco for a region with 14 million people, who are now paying for the mistakes made by airport’s management over the past 14 years, especially the construction of a second runway that was unnecessary,” said Ray Kruger of Academy Travel, an Osaka-based travel agency. “The high landing fees and operating costs have driven many carriers away and unless costs are reduced soon, Kansai airport will continue to lose business.”

Critics, both in Kansai and Tokyo, wondered how the airport would be able to compete for cargo flights with other, cheaper regional airports in Asia, given its already high operating costs, which they feared would become higher with a new runway to pay for.

“We recognize there is a need to lower landing fees at Kansai airport to compete internationally,” said Shuichi Kaneko, deputy general manager of the Kansai Association of Corporate Executives. “But lowering landing fees needs to occur within the larger debate about how to reform Kansai airport operations and what the role of (the) Kansai (region’s) other airports should be.”

The issue of the region having three airports has been quite contentious.

After years of controversy and local criticism in Tokyo and internationally that it was unnecessary, the domestic-only Kobe airport, which is almost within sight of Kansai airport, opened in February 2006.

Including domestic-only Itami airport, Kansai now had three major airports all competing for business in a shrinking market.

The situation worsened this summer when, due to soaring fuel costs, All Nippon Airways and Japan Airlines announced they would reduce flights to Kansai airport.

Most flights set to be abolished or suspended were domestic. But JAL’s Kansai to London service, the only daily direct flight from the Kansai region to the U.K., also faced the ax.

Enter Osaka Gov. Toru Hashimoto, who made several trips to Tokyo with airport officials to plead with ANA and JAL to keep their flights going and to lobby the central government to fund plans to build a major cargo hub.

Thanks to the lobbying by the outspoken governor and many area residents, JAL decided to hold off suspension of the London service.

But in late July, Hashimoto returned from a trip to Tokyo angry at what he saw as a lack of a national airport strategy at the transport ministry.

The governor suggested it was time to close Itami airport, which he has no authority over. The comment riled the governors of neighboring Hyogo and Kyoto prefectures, and prompted then transport minister Tetsuzo Fuyushiba to call the 38-year-old Hashimoto a political amateur.

Relations between Osaka Prefecture, other Kansai local governments and the transport ministry worsened late last month when it was revealed the ministry had no interest in funding local plans to turn Kansai airport into a major cargo hub, as it was not seeking funding for such plans in the 2009 fiscal budget.

The business community was shocked and angered by the ministry’s decision. The Kansai Association of Corporate Executives warned that failure to turn Kansai airport into a cargo hub would result in further loss of business to the benefit of other Asian airports.

“The reason for the ministry’s decision not to seek funding has to do with the airport’s failure to reach 135,000 takeoffs and landings annually by this fiscal year as originally promised. This is because of a decrease in passengers. But cargo flights have increased by 150 percent over the past two years,” the association said in a press statement.

The battle is not yet over. Japan’s chaotic political situation has made it uncertain what kind of funding the government will approve for Kansai airport next fiscal year.

But with high fuel costs causing higher ticket prices and flight cutbacks, fears are growing that more passengers in Kansai and west Japan will opt for the shinkansen for domestic travel or find better, cheaper international travel deals by flying out of Itami via Narita or Incheon.